In a surprise move, Verizon Communications, which has the 55 per cent majority shareholding in the Verizon Wireless joint venture with Vodafone, is to make an overall dividend payment this year of $7 billion, $3.15 billion of which will go to the UK partner.

Wall Street, analysts and shareholders were taken by surprise by the sudden largesse on the part of the American company which between 2005 and 2011 made no dividend payment at all. Shareholders were increasingly angry but the company argued that the money would be better used on paying down debt and making acquisitions. The strategy also put Vodafone on the spot, as it was meant to.

Vodafone eventually got about $8 billion in staggered dividend payments last year but it did little to assuage shareholder anger. It is thought that the loosening of the purse strings this year has more to do with pouring golden oil on the troubled waters of the TransAtlantic partnership than anything else - especially in light of a likely buy-out of Vodafone's share of the joint venture.

Something had to happen; relations between the two companies, long fractious, had reached a nadir in recent months with frequent well-placed leaks from Verizon stoking the fires by suggesting that it might, once again, refuse to make a dividend payment. The flames rose to new heights when the CEO of Verizon, Lowell McAdam, told analysts at JP Morgan that he would not pay a premium for Vodadfone's 45 per cent and so the shareholders would have to put up with yet another "lean year". Something or someone changed his mind for him.

Since the partnership was formed Verizon Wireless has grown to become the biggest mobile service provider in the US and in recent weeks speculation that it might move to acquire Vodafone's share of the jv has reached fever pitch. Back on April 24 it was reported that the US company would offer $100 billion but Vodafone reacted quickly saying that such a sum was derisory and would be rejected out of hand.

Vodafone is looking for considerably more and has signaled that the minimum price point at which it is willing to enter serious negotiations will be $120 billion and that it will be seeking payment towards the rumoured upper limit of $135 billion. It would use the money from Verizon to fund expansion and acquisitions outside the US.

Vodafone shares are up by 39.6 per cent since the start of the year.

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